Starting a small business can be a great way to make money. But before you take the plunge, it’s important to understand what type of business is best for you. The first step is to research the most profitable types. These include service businesses, online businesses, manufacturing businesses, and land subdivision businesses.
Types of Small Businesses
Service businesses provide services to customers for a fee. They have low startup costs and can be run from home. A tutoring business is a great example that you can start small and expand over time.
Online businesses range from e-commerce sites to digital media companies. They require some upfront investment but have potential for growth as demand increases.
Manufacturing businesses produce goods for sale. They require more significant capital investments but can be profitable if managed correctly.
Land subdivision businesses develop land for residential or commercial use. They tend to have healthy cash flow compared to other types.
Legal Structures for Small Businesses
When selecting a legal structure, most small businesses are either S corporations or limited liability companies (LLCs). These protect owners from some personal liability. Sole proprietorships offer more flexibility but less protection. Partnerships share control and liability among owners.
In determining which type is best, consider taxation, legal liability, startup costs, industry growth, profit potential, and your personal goals. With proper planning and advice, you can launch a successful business that fits your needs.
Small Business Success Rates
Out of every one-hundred businesses that start in 2023, only 40% of those small businesses will be successful and make money. Approximately thirty percent will break even, and some thirty percent will end up losing money. Longer-term, twenty percent of small businesses don’t make it past their first year.
One thing you should consider about your business idea is whether your concept meets a need in how people live their lives and approach their work. This, among other factors, will determine how successful your business will be.
Small Business Ideas and Opportunities
Online Reselling
Online reselling is one of the most successful business ideas in 2023 that require little or no capital.
Real Estate Business Models
Accounting services. There are many ways to break into the real estate business, but three of the most common small-business real estate models are flipping, renting, and selling as an agent – each with its own benefits and risks.
Culinary Ventures
Selling food for breakfast is an example of the first profitable short-term venture. Instant food has become one of the most sought-after types of food because it is considered efficient, especially by office workers in big cities.
Handyman Business
If you’re good at fixing things and have some basic tools, a handyman business can be among the most successful small business ideas.
Show Business
Show business provides lots of opportunities with great promises for income-generating activities such as selling antiques, photographs, or dance studios as a small business to start.
Consulting Services
Statistics suggest that now is an opportune time to consider this profitable business proposal. Consulting defines a consultant as “a professional who provides expert advice in a particular area such as business, education, law, regulatory compliance, human resources, marketing, finance, health care, engineering, science, security, or any of many other specialized fields”.
What Defines a Small Business?
A small business is a privately-owned enterprise that typically has fewer employees and generates lower revenue than larger companies. In the US, the Small Business Administration (SBA) defines a small business as having less than 1,500 employees for manufacturing businesses and less than $38.5 million in average annual revenue for most non-manufacturing industries.
Examples of Low-Cost Small Business Ideas
- Online reselling/e-commerce businesses – Can be run as a side gig initially.
- Handyman/Repair services – A local handyman business doing small home repairs.
- Content writing/blogging – Costs are minimal, just a computer and internet access.
- Bookkeeping services – Offering contracting bookkeeping services from home.
Some key factors that contribute to small business success include choosing an idea that fulfills customer needs, keeping overheads low, effectively marketing your services, and providing top-notch customer service. With good planning and execution, small businesses can thrive and be quite profitable. The opportunities are endless!